CSFB warns on ntl funding shortfall

The Independent has reported that international broker Credit Suisse First Boston has warned of a £530m funding cap in ntl's finances, as the sale of the company's transmission towers business falters.

Recent press reports have indicated that ntl has not managed to convince potential buyers - including France Telecom (a majority shareholder in ntl), and German bank WestLB - that the business is worth the £1.5bn it has budgeted for. If the sale is not completed soon, ntl will not, according to CSFB, be able to afford 2002's capital expenditure - throwing the company's cash funding plans through 2003 into chaos.

Currently ntl plans £925m capital expenditure for the 2002 financial year. This includes network and hardware upgrades, and the purchase and subsidising to customers of digital cable Set Top Boxes.

At its third quarter results presentation, ntl indicated that it does indeed plan to cut capital expenditure, but evidently was not anticipating the sort of crisis CSFB are warning about. The cable giant did however say that it would concentrate on upselling more expensive services to its existing customers in preference to expanding its total customer base; a recent example of this has been the decision to migrate customers subscribed to ntlworld free internet onto a similar unmetered service charged at £10 per month.